FCAI lashes out at government CO2 targets

Peak industry body takes a swing at fuel quality too, and demands 'whole of government' action

The Federal Chamber of Automotive Industries (FCAI) has issued a strong objection to the draft CO2 Regulation Impact Statement (RIS) that will form the basis for upcoming emissions standards.

In the 13-page document (including the appendices and footnotes), the Chamber delivered what might be called a measured broadside at the consultant whose report provided the foundation for the RIS, and the draft document itself.

The crux of the FCAI's concerns is that the goalposts have shifted since targets were announced by former prime minister, Julia Gillard, in advance of the 2010 federal election.

At the time Ms Gillard indicated the industry would need to match CO2 targets of 190g/km by 2015 and 155g/km by 2024. Those targets were challenging enough for the local automotive industry, the FCAI argues.

But at some point prior to the publication of the RIS, a consultant preparing unpublished information for the Department of Infrastructure and Transport arrived at the conclusion that the industry could accommodate harder targets – and sooner. A 2011 discussion paper that incorporates these findings can be read here.

The findings that found their way into the RIS include a target of 185g/km by 2015 and 130g/km by 2020. Not only are these tougher numbers to meet than those Julia Gillard originally announced back in 2010, but the deadline for the 130g/km target has been brought forward four years.

Representing both the local manufacturers and full-line importers, the FCAI has delivered a multi-pronged attack on the RIS, starting with the heavy dependence on European testing that doesn't apply in Australia, not least of all for the quality of fuel used.

The FCAI argues that the test fuel is 95 RON with a sulphur content of 10 ppm (10 parts per million). That is completely at odds with the typical fuel available in the local market and purchased by the majority of consumers – 91 RON with a sulphur content of 150 ppm. In Australia 95 RON fuel is sold through retail outlets, but the higher octane fuel's sulphur content remains too high, at 50 ppm.

So the FCAI argues that the draft RIS draws on spurious test data to arrive at a fallacy. The industry could introduce vehicles to meet those requirements – at considerable cost to the industry and ultimately the consumer – but without any actual prospect of achieving the goals of reducing overall CO2 emissions in the way the RIS outlines.

What's worse, according to the FCAI, improving fuel quality from 50 ppm to just 10 ppm for the 95 RON petrol would cost the consumer more each week, filling the tank. The FCAI estimates that if the retail price disparity between existing 95 RON and 91 RON were to continue – but with consumption of the former mandated in order to meet national CO2 targets – the burden would equate to as much as 15 cents a litre more. That would typically raise the price of a tank of fuel by as much as 10 per cent.

Ironically too, the refining process for much larger quantities of 95 RON would generate more CO2 discharged into the atmosphere rather than less, the FCAI suggests.

The FCAI also asserts that annual reports by the National Transport Commission have clearly shown the industry cleaning up its act without government intervention. Last year the NTC determined that national fleet CO2 emissions had dropped by 21 per cent during the previous 11 years. Based on that trend (equating to a 2.3 per cent reduction per annum), the industry could meet the former prime minister's targets – and possibly even better than originally proposed.

But the new targets amount to a 14 per cent and 30 per cent reduction on the 2008 levels by 2015 and 2024 respectively, the FCAI claims, and are "far in excess" of the five per cent reduction from 2000 levels by 2020.

Many of the assumptions made in the consultant's report – and reproduced in the RIS – are based on other European parameters that don't apply in Australia, says the FCAI. Fuel consumption figures in Europe are based on 'best-case scenario' testing, in which the lightest, most aerodynamic, smallest-displacement variant in a model range becomes the fuel consumption champion for certification testing. In Australia the reverse is true, the FCAI argues.

The 1.8-litre Honda Civic tested in the UK weighs over 100kg less than an Australian-spec version, largely accounting for the difference in rated CO2 emissions – 155g/km in Britain, 163 here. There's nearly a 15 per cent difference between the CO2 emissions for Britain's Mazda3 2.0-litre, versus Australias – 159g/km there, in contrast with 187 here. The FCAI offers heaps of similar examples, ranging from the Holden/Chevrolet Cruze 1.8 and Ford Fiesta 1.6-litre diesel and the Volkswagen Passat and Tiguan.

Furthermore, taken across the entire market, the European vehicle parc is composed of smaller cars and more manual transmissions than is the case in Australia. So the aggregate CO2 being pumped into the air from car exhausts is lower, per head of population in European markets than in Australia.

Having a bet each way, the FCAI also mounts a case that in the event the industry as a whole can meet the new nominal targets, it might over-achieve. European testing takes into account a changing vehicular footprint, but the RIS makes no allowance for the current Australian market trend to downsize with each new vehicle purchase. In other words, should the country's automotive industry achieve a better result than the new targets, it will mean the consumer has paid more than necessary for that to happen – both in fuel costs and vehicle purchase price.

The FCAI would like to see the government focus on other means of addressing vehicle fleet CO2 emissions. Some suggestions include a reduction of distance travelled by car, taking more (and older) cars off the road, encouraging increased use of biofuels or purchasing fuel-efficient vehicles, and improving road infrastructure.

While upcoming emissions legislation is believed to have played a part in Ford Australia's decision to close down its manufacturing plant with effect from 2016, it has the potential to reduce the diversity of product lines offered by importers as well. The FCAI reports that one unnamed importer has already decided it wouldn't go ahead with the local introduction of a specific model, because complying with uniquely Australia design rules ('ADRs') for that model would cost the company as much as $46 million.

The following are the new emissions standards to be introduced over the next few years:

ADR 79/03 – Euro 5 Stage 1 – introduction for all new models with effect from November 1, 2013

ADR 79/04 – Euro 5 Stage 2 – introduction for all models with effect from November 1, 2016

ADR 79/05 – Euro 6 – introduction for new models with effect from July 1, 2017 and all models with effect from July 1, 2018

Read the latest news and reviews on your mobile, iPhone or PDA at carsales' mobile site...

FCAI lashes out at government CO2 targets

Tags